Writer: Joshua Andino
2 min read February 2023 — Interest rates and inventory remain the name of the game in Greater Orlando’s real estate market, keeping prices high even as demand begins to slow.
The ongoing in-migration to Florida’s metropolitan areas shows no signs of slowing, and while nationally the housing market has begun to slow, the lack of available inventory in Orlando means that prices will continue to remain high, if potentially leveling-off over the next few months. According to Rocket Homes January report, the number of homes for sale decreased 2.5% between December to January, while prices for 1- and 2-bedroom properties went up by just over 25%. Other properties such as 3-, 4-, and 5-bedroom houses also saw continued price appreciation. The median price of a single family home now stands at $399,900
The total number of homes sold declined 34.3%, down to 184 from December’s 280. While interest rates declined slightly from 6.6% to 6.1%, they nevertheless remain high enough for many to reconsider moving forward. More and more people are also staying put for longer in their homes, either as a result of home improvement projects or having locked-in a low interest rate payment that no longer exists in today’s environment.
“The catch-22 right now is that many people who bought a few years ago could not afford the house that they’re living in if they wanted to buy it today. They can make a lot of money selling but where are they going to live once they sell? This leaves people stuck where they are,” explained Sean Frank, founder of Mainframe Real Estate in an interview last year with Invest:. “People don’t want to double or triple their mortgage payment. At the height of COVID, rates were low and people decided to refinance and stay in their home. A lot of these people reinvested in their homes. There are a lot of people who have no intention of selling.”
Between constrained inventory, interest rates and the number of new residents across the Orlando market, price relief for long-time locals remains out of sight. “People are moving to Florida with a lot of money after selling their homes in higher-priced markets and that is pricing out local Floridians and depleting the limited inventory. A lot of people have already been priced out of the Central Florida market,” said Frank.
According to the Orlando Realtors Association, inventory currently sits at 4,485 units, spending about 66 days on the market from listing to contract, double the 33-day average from this time last year.
“The white-hot seller’s market we saw last year is over as we’re now seeing a more traditional market,” said Lisa Hill, 2023 Orlando Regional REALTOR® Association President. “Inventory is on the rise, giving buyers more options. However, those buyers are also faced with higher interest rates, which will have the biggest impact on the market in 2023.”
The Orlando Economic Partnership is expecting to see 1,500 people settling in Orlando per week up to 2030. Florida overall has seen its population swell, and has helped to insulate local markets from a national slowdown due to population growth and the state’s favorable tax structure and business opportunities.
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